Wal-Mart starts corruption probe

Wal-Mart, the world's biggest retailer, has began an investigation into
whether some of its employees outside the US broke the country's
anti-corruption laws.

Wal-Mart, which was founded in 1962 by Sam Walton with one store in a town in Arkansas, has been expanding overseas since the early 1990s in an effort to tap growth in emerging markets, as well as compensate for much slower growth in the US.

In a filing with the Securities and Exchange Commission, the company said that its investigation is focused on the permitting, licensing and inspection of stores. It did not disclose where in the world the investigation is taking place. The company has more than 5,000 stores in 27 countries outside the US.

The Foreign Corrupt Practices Acts (FCPA) forbids employees of US companies bribing foreign officials, and violating the FCPA can bring heavy fines. Wal-Mart, which has made the Department of Justice and the Securities and Exchange Commission aware of its investigation, said that it could not estimate the potential liability stemming from the possible violations.

However, it added that "based on the facts currently known, we do not believe that these matters will have a material adverse effect on our business."

Wal-Mart, which was founded in 1962 by Sam Walton with one store in a town in Arkansas, has been expanding overseas since the early 1990s in an effort to tap growth in emerging markets, as well as compensate for much slower growth in the US. The company surprised Wall Street analysts last month by growing sales in the US in the third quarter for the first time in more than two years. Like rival retailers, Wal-Mart is currently gearing up for the critical Christmas selling season.

According to Wal-Mart, the investigation emerged from a review of its own policies for complying with anti-corruption laws. Wal-Mart's efforts to expand outside the US have been checkered. It gave up on Russia this year and is under investigation by Chinese authorities for allegedly misrepresenting cheaper pork as a more expensive variety.